The Oyez Project: 2006 Term Opinions by Scalia

Beck v. PACE International Union

During Chapter 11 liquidation proceedings, Crown Vantage, Inc. (Crown) terminated its employee pension plan and purchased an annuity for the employee participants as a replacement. The participants advocated merging the current plan into a multiemployer PACE International Union (PACE) pension plan but Crown did not investigate the possibility. The participants alleged that Crown breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) by not acting "solely in the interests of the participants" (Section 1104(a)(1)). A bankruptcy court ordered Crown to maintain the plan's funds until they were distributed to the participants.

A District Court affirmed, finding that Crown failed to consider its employees' interest. Crown appealed to the U.S. Court of Appeals for the Ninth Circuit, claiming that it did not consider the PACE plan because Section 4041 of ERISA prevents termination by way of a merger into a multiemployer plan. The Ninth Circuit affirmed the District Court, ruling that ERISA does allow termination by way of a merger into a multiemployer plan.

Davenport v. Washington Education Association

In some states, public sector labor unions are allowed to collect fees from non-union members. The Supreme Court has ruled that unions may use these fees for political purposes, but only if the non-union member does not object. Washington state also has a "paycheck protection" law, RCW 42.17.760, which requires unions to obtain specific permission from non-members before using their fees for political activity. Davenport, a non-union teacher, sued the Washington Education Association (WEA) teacher's union for violating the law.

WEA appealed to the Washington Court of Appeals, arguing that Washington's requirement that unions get prior permission was an unconstitutional burden on the unions' First Amendment right to associate for political purposes. Davenport countered that his own First Amendment rights were being violated when his fees went to political causes he did not agree with. The state Court of Appeals ruled in favor of WEA.

On appeal, the Washington Supreme Court affirmed, ruling that the burden must lie on the nonmember to assert his rights and object to the political fees.

Fry v. Pliler

After extraordinarily long deliberations, a jury convicted John Fry of two counts of first degree murder. Near the end of the trial, the defense attempted to bring a witness who would testify that her cousin rather than Fry had committed the murders. The trial judge refused to let the witness testify. After exhausting his state court appeals, Fry petitioned for a writ of habeas corpus in federal court.

The District Court held that the trial judge had been wrong to exclude the witness, but it ruled that the decision was harmless error and upheld the conviction. The U.S. Court of Appeals for the Ninth Circuit affirmed, holding that the judge's decision met the test for harmless error in Brecht v. Abrahamson. Under the Brecht test, evidence is held to be harmless unless it has a "substantial and injurious effect or influence in determining the jury's verdict." Fry argued that the standard for harmless error in habeas cases should instead be the one defined in Chapman v. California. The Chapman test requires the state to prove that the error was harmless beyond a reasonable doubt.

MedImmune, Inc. v. Genentech, Inc.

Genentech held the patent for "Cabilly I", a process for using cell cultures to manufacture human antibodies. MedImmune had a licensing agreement with Genentech under which MedImmune paid royalties to Genentech in return for the use of the patent. Later, Genentech also obtained the patent to "Cabilly II," a continuation of the Cabilly I process. Under the licensing agreement, MedImmune became a licensee for Cabilly II as well. Genentech informed MedImmune that it would have to pay royalties on one of its most lucrative products, Synagis, which uses the Cabilly II process. MedImmune sued Genentech, claiming that the patent was invalid and unenforceable. However, MedImmune kept paying the royalties.

A federal District Court dismissed the suit because it did not present a controversy. Article III of the Constitution limits the jurisdiction of federal courts to "cases or controversies." This is implemented in the Declaratory Judgment Act, which requires that a suit involve an "actual controversy." Genentech argued that since MedImmune was still paying royalties on the patent, there was no controversy. MedImmune countered that though it was indeed still paying royalties on the patent it claimed was invalid, it was paying "under protest." It would be unreasonable, MedImmune argued, for the company to be required to break its contractual obligations by stopping royalty payments before suing. This might jeopardize MedImmune's legal rights to one of its best-selling products.

The U.S. Court of Appeals for the Federal Circuit ruled for Genentech and upheld the District Court, holding that the suit presented no actual controversy.

PowerEx Corp. v. Reliant Energy Services, Inc.

The state of California suffered an energy crisis in 2001. Citizens filed suit against energy company Reliant Energy Services et al (Reliant) for conspiring to fix energy price levels. Reliant filed cross-claims against multiple energy companies and regulatory agencies involved in the price fixing, including the Canadian company PowerEx Corporation. PowerEx exported surplus Canadian hydropower on behalf of its owner, the British Columbia Hydro and Power Authority (BC Hydro). Since BC Hydro was a governmental corporation and PowerEx was its subsidiary, both argued that they were entitled to sovereign immunity under the Foreign Sovereign Immunity Act of 1976 (FSIA). FSIA defines a foreign sovereign as an "organ of a foreign state" (28 U.S.C. Section 1603(b)). Reliant claimed that the two companies were exempt from FSIA sovereign immunity because their commercial activity had a "direct effect" on California energy markets.

A District Court ruled that BC Hydro was a foreign sovereign, but PowerEx was not. The District Court issued a remand order sending the case back to state court. PowerEx appealed to the U.S. Court of Appeals for the Ninth Circuit, claiming that it operated for the "public interest" as an instrumentality of the government. The Ninth Circuit held that PowerEx was not a "foreign sovereign" because BC Hydro, not the Canadian government, owned PowerEx's shares.

Rockwell International Corp. v. United States ex rel Stone

Stone sued his employer, nuclear weapons plant operator Rockwell International, under the False Claims Act (FCA). He took advantage of the FCA's "qui tam" provision, which allows an individual to sue on behalf of the government. Stone alleged that Rockwell had made false claims about the environmental safety of "pondcrete," a mixture of cement and sludge used for nuclear waste storage. In a qui tam action under the FCA, the person bringing the suit must be the "original source" of the information on which his claim is based. Rockwell argued that Stone was not an original source because he did not have "direct and independent knowledge" of the information at issue in the suit, as required by the FCA.

The District Court ruled that Stone qualified as an original source, and a divided panel of the U.S. Circuit Court for the Tenth Circuit affirmed. The Supreme Court agreed to resolve the question of how much and what kind of knowledge an FCA qui tam plaintiff must have.

Scott v. Harris

After a police officer attempted to pull him over for speeding, Victor Harris fled in his vehicle, initiating a high-speed car chase. Attempting to end the chase, Deputy Timothy Scott rammed Harris's vehicle with his police cruiser. Harris crashed and was rendered a quadriplegic. Harris sued Scott in federal District Court, alleging that Scott had violated his Fourth Amendment rights by using excessive force. Scott claimed qualified immunity as a government official acting in his official capacity, but the District Court rejected the claim. The U.S. Court of Appeals for the Eleventh Circuit affirmed.

In order to show that a government official is not entitled to qualified immunity, a plaintiff is required to prove that the official violated a clearly established constitutional right. The Eleventh Circuit ruled that Scott's actions constituted an unreasonable seizure in violation of the Fourth Amendment. Because there was no imminent threat - Harris remained in control of his vehicle and the roads were relatively empty - Scott's use of deadly force was unconstitutional. Although no Appellate Court had ruled on the specific question of the use of deadly force in a high-speed chase, the Eleventh Circuit ruled that the limits on deadly force were "clearly established."

Wallace v. Kato

In 1994, Andre Wallace was arrested and charged with murder. Two years later he was convicted and sent to prison. Wallace appealed, arguing that the police had arrested him without probable cause and coerced him into confessing to the crime. In 1998, an appeals court agreed that Wallace had been arrested without probable cause and granted him a new trial. Finally, in 2002, the prosecution dropped its case against him. The next year Wallace sued the police officers and the city of Chicago for violating his Fourth Amendment rights through false arrest.

The District Court ruled against Wallace, because his suit was time-barred. In Illinois there is a two-year statute of limitations on false-arrest claims. Since Wallace had not brought suit within two years of either his arrest or the time the arrest was declared invalid, his time was up. Wallace appealed to the Seventh Circuit Court of Appeals, arguing that the two-year limit did not begin until his conviction was finally set aside in 2002.

The Circuit Court upheld the District Court, ruling against Wallace. The Circuit Court panel acknowledged that other Circuits had failed to agree on the question of when the statute of limitations for a false arrest claim should begin. The Seventh Circuit opted for a clear rule - the two-year limit starts at the time of the arrest, and therefore Wallace's suit was too late